Does an A B living trust have any disadvantages?
An AB trust, sometimes referred to as an ABC trust, does have several disadvantages. The purpose of why we setup AB trusts were to avoid federal estate tax when the threshold was very low. Now in 2016, an individual can have 5.45 million dollars before we're worried about federal estate tax. Now if you have an AB trust and are below that 5.45 million dollar threshold, it can actually create some tax problems for your beneficiaries.